The bottom line has hit the directors of ASX-listed Lantern Hotel Group, as big shareholders succeed in ousting them in favour of more experience and the promise of potential.
Millinium Asset Services served Lantern (LTN) notice in April it was exercising its right as a 24 per cent shareholder to call a general meeting. This took place yesterday.
The meeting was to vote on five resolutions: to remove existing board members Brian Mogridge, Russell Naylor and Deborah Cartwright, and to install the better-qualified John Murphy and Graeme Campbell.
All resolutions proposed were passed 55 per cent to 45 per cent.
Millinium cited numerous reasons for the initiative, including questions around the independence of all three directors in question and their relationship with major LTN shareholder Pyne Group.
But more significantly the motion sought to address the relevant experience of the directors to run an ASX-listed entity and the thirteen venues across NSW and Queensland under its control.
The Section 249N and 203D motions Millinium submitted reported that LTN’s $97 million of net assets delivered a loss of $2.15 million in FY14.
It also detailed the performance of six top-150 LTN gaming venues that have between them dropped an average of 82 places over the last four years.
Millinium has been dissatisfied with the state of its LTN investment for some time.
Early last year it attempted to sell its shares to Totem Holdings and CVC Limited, but a court injunction by LTN prevented the sale. Millinium and LTN entered into a ‘Settlement Deed’ that has failed to gain approval from ASIC.
LTN has insisted this deal is still on track, but Millinium says obligations have not been met and it is entitled to significant damages.
The Millinium director proposal negated this stoush, as the company waived its rights under the Settlement Deed on condition the resolutions passed.
The new directors, John Murphy and Graeme Campbell, bring an impressive resume of experience. Murphy served as Australasian CEO of packaging giant Visy, managing director of CUB, and most recently managing director of CCA Australia.
Campbell will be calling on his 30 years’ experience in corporate recovery and insolvency, as a former director of hospitality specialist Ferrier Hodgson and founder of consultancy Campbell Advisory. He is also the lead independent director of Ainsworth Game Technology, and independent director of Liquor Marketing Group.
Campbell was quoted in The Australian as saying the first consideration will be to assess the company’s current position.
“What data the company has provided to date hasn’t been adequate for investors, and we’d like to conduct a detailed operational review in conjunction with our bankers,” he said.
“That should give us the way with which to move forward, because while we have good properties they are operating at a less-than-optimum level.”